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Posted Tue May 03 11:02:50 EAT 2016

Here is the cheapest route to real estate business

One of the apartments constructed by National Housing and Construction Company. Prospective entrepreneurs in real estate are always put off by the impossibly huge capital needed to venture into the industry. FILE

By OTIATO GUGUYU

In Summary

As an investor, you earn from your unit when it is rented out. As the developer will be operating under an internationally recognised brand, your investment will have a head-start in the increasingly competitive industry.

The advantage is that investors are buying into a recognised brand and hence do not have to go through the gruelling process of marketing and position the business in the market.

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Prospective entrepreneurs in real estate are always put off by the impossibly huge capital needed to venture into the industry.

Even buying just land is bound to set you back millions of shillings especially in Nairobi where the prices have gone through the roof. When you add the prohibitive construction costs, you are talking of an industry that’s largely the exclusive domain of the moneyed.

However a new model is set to change this and with less than Sh10 million you can be in real estate business. All you need to do is buy a unit of an apartment and allow the developer to run it commercially.

Kenyans are used to a situation where you buy a unit of an apartment for a home. However, in the new model, you buy it as a form of investment. Anyone who can afford can own a unit — one to three bedroom unit — and surrender it to an operator who will run it for the investors.

Soho furnished apartments are the trailblazers in this novel ground.

As an investor, you earn from your unit when it is rented out. As the developer will be operating under an internationally recognised brand, your investment will have a head-start in the increasingly competitive industry.

“You will be able to obtain your lease and title to the property but you will be tied to an international operator,” said Mr Nathan Luesby, a consultant for the project.